US, Europe shares gain; oil prices surge 3%

Stocks on major world markets gained on Thursday, while oil prices surged more than 3 percent on buying triggered by comments from an Saudi oil minister and a forecast that crude markets are set to tighten.

With bond yields low in developed economies as central banks maintain accommodative monetary policies, investors have sought out equities for yield. (Reuters)

Stocks on major world markets gained on Thursday, while oil prices surged more than 3 percent on buying triggered by comments from an Saudi oil minister and a forecast that crude markets are set to tighten.

Major U.S. stock indexes gained, climbing back near their all-time records. The pan-European FTSEurofirst 300 stock index climbed 0.5 percent, its sixth day of gains in the past seven.

With bond yields low in developed economies as central banks maintain accommodative monetary policies, investors have sought out equities for yield.

U.S. equity investors on Thursday seized on labor data showing a drop in jobless claims and corporate updates from department store operators Macy’s and Kohls.

“There seems to be little risk that central banks, either domestically or internationally, are going to do anything to disrupt what has been a fragile global recovery,” said Alan Gayle, director of asset allocation at RidgeWorth Investments in Atlanta, Georgia.

“That stance reassures investors that potential downside risk is likely to be limited, and so it’s more likely to respond positively to any good news.”

The Dow Jones industrial average rose 106.59 points, or 0.58 percent, to 18,602.25, the S&P 500 gained 8.8 points, or 0.4 percent, to 2,184.29 and the Nasdaq Composite added 16.70 points, or 0.32 percent, to 5,221.29.

The energy sector was the best-performing major S&P group, buoyed by the rise in oil prices.
MSCI’s all-world index rose 0.4 percent to nearly a year high, for a fifth session of gains out of the past six.

Oil prices rose after comments from the Saudi oil minister about possible action to stabilize prices triggered a round of buying and the International Energy Agency forecast crude markets would tighten in the second half of 2016.

“Oil’s drop … has put the ‘glut’ back into the headlines even though our balances show essentially no oversupply during the second half of the year,” the Paris-based IEA said in its monthly report.